Comments on: Roth IRA income limits- What happens if you go over? http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/ IRA Questions and Answers Thu, 20 Oct 2011 14:36:38 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Marc http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/comment-page-1/#comment-1040 Marc Wed, 14 Apr 2010 04:11:52 +0000 http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/#comment-1040 Moneyguy, sometimes you do not know that you will exceed the limit and make a contribution. For example this year we contributed to the current year (2010) IRA in February. In March we found out that because of a death in my wifes family we received some additional taxable income that may put us over the 167,000 dollar limit for this year. Moneyguy, sometimes you do not know that you will exceed the limit and make a contribution. For example this year we contributed to the current year (2010) IRA in February. In March we found out that because of a death in my wifes family we received some additional taxable income that may put us over the 167,000 dollar limit for this year.

]]> By: moneyguy http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/comment-page-1/#comment-634 moneyguy Sun, 28 Feb 2010 12:28:22 +0000 http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/#comment-634 I do believe the previous two posts erroneously thought you contributed in a year in which you exceeded the income limits. Your income in any given year does not in any way affect previous years of contributions. You would not under any circumstance want to convert a Roth IRA to a traditional IRA. You've already paid taxes on your Roth contributions, and there would be no advantage to converting to a traditional IRA. Simply, in any year when you have exceeded the income limits, you cannot make a Roth contribution for that period. All your previous contributions are safe, and should your income drop in the future, Roth limits rise, or you get married and suddenly find yourself eligible to contribute again, your Roth account will be ready willing and able to accept your further contributions. moneyguy976@gmail.com I do believe the previous two posts erroneously thought you contributed in a year in which you exceeded the income limits. Your income in any given year does not in any way affect previous years of contributions.

You would not under any circumstance want to convert a Roth IRA to a traditional IRA. You’ve already paid taxes on your Roth contributions, and there would be no advantage to converting to a traditional IRA.

Simply, in any year when you have exceeded the income limits, you cannot make a Roth contribution for that period. All your previous contributions are safe, and should your income drop in the future, Roth limits rise, or you get married and suddenly find yourself eligible to contribute again, your Roth account will be ready willing and able to accept your further contributions.

moneyguy976@gmail.com

]]> By: ninasgramma http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/comment-page-1/#comment-633 ninasgramma Sun, 28 Feb 2010 12:15:50 +0000 http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/#comment-633 If you have exceeded the income limits to contribute to a Roth IRA, you can recharacterize the Roth IRA contribution you made (plus any earnings) to a traditional (nondeductible) IRA. Your financial institution will have the paperwork to do this. If you recharacterize your 2007 Roth IRA contributions and earnings to a traditional, no taxes will be owed. You will file Form 8606 to document the transaction. If you have exceeded the income limits to contribute to a Roth IRA, you can recharacterize the Roth IRA contribution you made (plus any earnings) to a traditional (nondeductible) IRA. Your financial institution will have the paperwork to do this.

If you recharacterize your 2007 Roth IRA contributions and earnings to a traditional, no taxes will be owed. You will file Form 8606 to document the transaction.

]]> By: v b http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/comment-page-1/#comment-632 v b Sun, 28 Feb 2010 11:38:36 +0000 http://www.iraroth.net/2010/02/roth-ira-income-limits-what-happens-if-you-go-over/#comment-632 I don't think I understand your question. Where you contributing or rolling money over? If your income was too high to contribute, you have excess contributions that need to be removed before 10/15 the following year. If your income is too high to roll money over from a traditional IRA you either recharacterize it or treat it as excess contribtutions. Excess contributions that aren't removed are subject to 6% excise tax for each year you have an excess. See form 5329. I don’t think I understand your question.

Where you contributing or rolling money over?

If your income was too high to contribute, you have excess contributions that need to be removed before 10/15 the following year. If your income is too high to roll money over from a traditional IRA you either recharacterize it or treat it as excess contribtutions.

Excess contributions that aren’t removed are subject to 6% excise tax for each year you have an excess. See form 5329.

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